Gold Reserve Act

Examples of Gold Reserve Act in the following topics:

• Banking and Finance Reform

  • The act was passed and signed into law the same day.
  • Three-quarters of the banks in the Federal Reserve System reopened within the next three days.
  • The Federal Reserve was required by law to have 40 percent gold backing their cash notes, and thus, could not expand the money supply beyond what was allowed by the gold reserves held in their vaults.
  • Adherence to the gold standard prevented the Federal Reserve from expanding the money supply in order to stimulate the economy, fund insolvent banks, and fund government deficits which could "prime the pump" for an expansion.
  • With the passage of the Gold Reserve Act in 1934, the nominal price of gold was changed from $20.67 per troy ounce to $35.

• Strengthening the Monetary System

  • Every U.S. dollar could be always exchanged for a fixed amount of gold, which meant that the supply of money could be increased only if the reserve of gold increased too.
  • In the aftermath of World War I,  the international balance between gold reserves and paper money was thus dramatically shaken.
  • In June of the same year, more long-term solutions were presented in the Banking Act of 1933 (also known as the Glass-Steagall Act although this term is not precise and usually refers to the provisions of the Banking Act of 1933 that dealt with commercial bank).
  • Some of the provisions of the 1933 Banking Act are still in effect.
  • With the passage of the Gold Reserve Act in 1934, the nominal price of gold was changed from $20.67 per troy ounce to $35 and most of the private possession of gold was outlawed.

• The Economy and the Silver Solution

  • The Sherman Silver Purchase Act was enacted on July 14, 1890 as a United States federal law.
  • Under the Act, the federal government purchased millions of ounces of silver, with issues of paper currency.
  • That plan backfired, as people, mostly investors, turned in the new coin notes for gold dollars, thus depleting the government's gold reserves.
  • After the Panic of 1893 broke, President Grover Cleveland oversaw the repeal of the Act in 1893 to prevent the depletion of the country's gold reserves.
  • While the repeal of the Act is sometimes blamed for the Panic, the Panic was already well underway.

• The Federal Reserve Act

  • President Wilson secured passage of the Federal Reserve Act in late 1913.
  • President Wilson secured passage of the Federal Reserve Act in late 1913, as an attempt to carve out a middle ground between conservative Republicans, led by Senator Nelson W.
  • The final Federal Reserve Act passed in December 1913, and most bankers criticized the plan for giving too much financial control to Washington, while liberal reformers claimed that it allowed bankers to maintain too much power.
  • Wilson named Paul Warburg and other prominent bankers to direct the Federal Reserve.
  • Despite the fact that the Act intended to diminish the influence of the New York banks, the New York branch continued to dominate the Federal Reserve until the New Deal reorganized and strengthened the Federal Reserve in the 1930s.

• Reaction and Recession

  • In the months of the 1937-38 recession, the trends reserved rapidly.
  • Others point to the changes in monetary policies introduced by the Federal Reserve that in 1936 doubled reserve requirements and tightened credit requirements  (requiring banks to keep more reserves led to contraction in the money supply).
  • In the fall of 1937, the Housing Act (known also as the Wagner-Steagall Act) introduced government subsidies for local public housing agencies to improve living conditions for low-income families.
  • In February 1938, Congress passed the second Agricultural Adjustment Act (AAA), which authorized crop loans, crop insurance against natural disasters, and large subsidies to farmers who cut back production.
  • The Federal Reserve decreased reserve requirements and the government's intervention in controlling gold reserves already in the country and coming into the country decreased.

• Silverties Versus Goldbugs

  • After the war, the government passed the Fourth Coinage Act in 1873 and soon resumed payments without the free and unlimited coinage of silver.
  • This put the U.S. on a mono-metallic gold standard.
  • They referred to this act as "The Crime of '73," as it was judged to have inhibited inflation.
  • The Silverites were members of a political movement in the United States in the late 1800s that advocated that silver should continue to be a monetary standard along with gold, as authorized under the Coinage Act of 1792.
  • The Silverite coalition's famous slogan was "16 to 1" – that is, the ratio of sixteen ounces of silver equal in value to one ounce of gold, a ratio similar to that established in the Coinage Act of 1834.

• The Nixon Shock

  • The "Nixon Shock" ended the direct convertibility of the United States dollar to gold, otherwise known as the gold standard.
  • Switzerland redeemed $50 million in paper dollars for gold in July of the same year.
  • France, in particular, repeatedly made aggressive demands, and acquired $191 million in gold, further depleting the U.S. gold reserves.
  • Most importantly, Nixon "closed the gold window," ending convertibility between US dollars and gold on August 15, 1971.
  • A number of gold standard advocates also call for a mandated end to fractional reserve banking.

• The California Gold Rush

  • The California Gold Rush began on January 24, 1848, when James W.
  • Marshall found gold at Sutter's Mill in Coloma, California.
  • At first, the gold nuggets could be picked up off the ground.
  • The effects of the Gold Rush were substantial.
  • Newspapers were established, and musicians, singers, and acting companies arrived to entertain the gold-seekers.

• Gold Fever in the West

  • As the war was ending gold was discovered in the north, and the word soon spread worldwide.
  • A San Francisco newspaper stated, "The whole country... resounds to the sordid cry of gold!
  • Gold!
  • Gold!
  • Each camp had its own rules and often handed out justice by popular vote, sometimes acting fairly and at times exercising vigilantism—with Indians, Mexicans, and Chinese generally receiving the harshest sentences.

• Competing Solutions

  • Furthermore, lowering taxes, public work projects, and loosening credit policies by the Federal Reserve aimed to energize the economy.
  • First, in 1930, he signed the Smoot-Hawley Tariff Act that raised U.S. tariffs.
  • Finally, the 1932 Norris-La Guardia Anti-injunction Act supported the organized labor.
  • Roosevelt also prohibited the export of gold from the United States and thus took the country off the gold standard (1933).
  • The National Labor Relations Act (1933), which established the National Labor Relations Board (1935).